BUILDING TO SUIT:Vornado’s big 59th Street project at the old Alexander’s location will no longer have a hotel because Bloomberg wants more space.N.Y. Post: Don HalasyTHE Vornado project at the full block Alexander’s site at 59 Street and Lexington Avenue is chugging full steam ahead and it’s going to be only one tall tower – not two, as we had been told in the last update.
Said a highly placed source: “You wouldn’t want to build two towers on that site.”
The architects are now refining plans for the guts because the plumbing requirements have changed. Simply put, the luxury hotel and its numerous bathrooms are kaput.
That is all a function of Bloomberg now taking more office space. Mike Bloomberg himself, we understand, showed up at lease negotiations earlier this month.
“There’s no more hotel because he took more space,” said our source.
The Bloomberg lease is now about 101,000 square feet bigger and better than before – roughly 550,000 total. “That pushed him [Bloomberg] up further into the tower, and now the condos are higher.”
Previous plans filed at the Buildings Dept. show a 77-story tower with floors three to six having offices and seven to 26 for hotel usage. The 27th floor was reserved for mechanical space and then the condo residences started at 37.
Stay tuned for further developments. Vornado is now pulling various permits almost daily.
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Investor Sam Zell was upbeat for someone sure we’re already in a recession that will last through 2001. That’s because as the real estate industry heads for oligopoly, his five Equity Real Estate Investment Trusts – owners of 100 million square feet of commerical space and 250,000 apartments – will be among those left standing.
But he warned no one will buy perhaps 60 to 80 of the other small REITs, “unless maybe the price were cut in half.”
“Those companies will slowly but surely disappear into the sunset and continue their irrelevancy,” Zell added.
Talking to analysts and lenders at real estate information provider REIS.com’s Annual Client Forum at the Four Seasons Hotel on Wednesday, Zell seemed enthralled by the buying power and cross marketing offered by size. He also likes the swift real estate market reactions enabled by the fast flow of data – including the ability to raise $1 billion in debt in a day, as Equity did recently.
“We never had a real estate market that responded to reality before,” Zell said. “We never had a real estate market that defined itself based on real numbers.”
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John Cushman, speaking to his Cushman Realty Corporation’s annual city dinner event at Le Cirque 2000 on Thursday night, warned owners not to become lackadasical about the energy crisis in California.
“It’s a catastrophic problem and can spill over to other cities,” he said. “When they start messing with the grid system, you might find that where you were OK, you might not be OK.”
The cocktail patter often surrounded the pending sale of Citigroup Tower to Eric Hadar and family. To set the record straight, the ask was $750 million, but the correct, and as of Friday morning still not signed purchase price, is $725 million.
Some folks protest too much that Hadars’ also-pending 1 East 57 St. net lease deal with LVMH and the deal with Dai-ichi for Citigroup Tower are not connected. “Deutsche Bank wouldn’t want to hear that,” advised one source familiar with the funding.
The high powered dinner group believes Hadar has the ability to raise the money to buy it. They just can’t understand how he’ll add value – he’s a cash flow guy that typically net leases out buildings to others. So someone has to run it for him – perhaps Jones Lang Wootton will remain.
And they don’t understand tying up the capital and debt to get what they consider a low, steady 7 percent return. There’s also a question of the work and money that is needed to spruce up the 24-year-old building.
Remember, these people they didn’t buy, and many didn’t bid on the skyline trophy. Are they jealous? Probably. Are they lying in wait for a crash and burn? Always.
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Quidnunc, an Internet consulting and technology firm, has leased three floors, totalling 34,200 square feet at 218 West 40 St. The company’s leader is Laurence Holt, who was among those involved in creating early Internet mail programs.
Newmark’s Jimmy Kuhn and Brian Waterman repped the tenant and the firm’s Mike Dreizen worked on behalf of the ownership.
Quidnunc is nearly doubling the current space it has at 118 East 25 St.
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